In the midst of a jobs crunch that has thousands of people out of work in Silicon Valley, there's a hiring frenzy going on among startups, social networking companies and some of the valley's tech giants.

The Googles and Apples of the valley are competing with nimble, fast-growing social networking sites such as Facebook, Twitter, and LinkedIn. Startups are scrambling for good hires, offering the thrill of creating something new instead of big salaries.

While a hiring boom may seem a contradiction when so many people are unemployed, the reality is that many of those out of work don't have the skills some of these companies are looking for.

"There is not even nearly enough engineers, developers and research scientists here in the Bay Area," said Greg Mikulin, co-founder of Clarity Technology Partners in Palo Alto, a staffing agency. "The motivated people who have this pedigree are all working."

The hiring began in earnest last fall, according to those who follow the social media and search business, and really picked up steam at the beginning of this year. It helps explain why the valley posted its first year-over job increase in 23 months on Friday, although unemployment remained unchanged at 11.2 percent.

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Google has lost some high profile people to Facebook and is reportedly offering large retention bonuses to a few key employees while aggressively expanding its sales and engineering side. It added about 3,500 people globally in the first three quarters of the year, putting pressure on smaller but fast-growing companies that are hiring from the same select pool of candidates.

"There's definitely a war for talent between the large companies and the startups," said Tom Silver, vice president of tech job listing service Dice.com.

Overall, tech job listings are up 38 percent nationally from last year on Dice.com, Silver said, but they have jumped 64 percent in Silicon Valley. Indeed.com, which aggregates thousands of employment sites, says the leaders in the number of jobs open are Apple and Google.

Redbeacon, which offers multiple price quotes on local services like gardening and home repair and was founded in 2008 by ex-Google employees, recently hired an in-house recruiter to "work every single day on hiring," said co-founder Ethan Anderson. "We're seeing definitely one of the most challenging recruiting environments in memory, especially in the technical area."

That's partly because of the rise of angel and micro-venture investing, he said, which involves individuals and small groups raising $1 million to $2 million to fund startups. "That means there are more engineers starting more companies," Anderson said. "Each will have two or three engineers, but there are hundreds of them, so that on a per-company basis there are fewer engineers available."

A second challenge is the sheer volume of hiring by larger companies like Google, he said. Or Cisco, for that matter, which expects to add 2,000 to 3,000 people worldwide in the next several quarters.

While the hiring frenzy has spawned a seller's market for top talent, it's leaving some midlevel technical workers sitting on the sidelines, Mikulin of Clarity said. With the rise of cloud computing -- the Internet-based sharing of software and information -- some desktop and support positions are disappearing, he noted. "It's some of the lower level jobs that are starting to go away, unfortunately," he said.

"The cloud and enterprise spaces right now are absolutely on fire," said Aaron Levie, founder of Box.net, an online work space information sharing company that's moving into bigger quarters this week to house a staff that's grown 70 percent this year.

Krish Parikh, 27, an M.I.T. grad in engineering and computer science, came to Box.net from Oracle a month ago. He said he has no regrets. "It's very exciting, the atmosphere is great, and there's a lot of energy. People come in early, stay late -- it's the make-it-or-break-it aspect of startups."

LinkedIn, an online professional network based in Mountain View, will nearly double in size this year, from 450 to 850 people, said Steve Cadigan, LinkedIn's vice president of people operations. "Reading a lot of the articles about what's happening with unemployment, I feel like I'm living in a different world here," he said.

While Google expands its work force, other companies lure the workers Google already has. Facebook has hired away some of Google's top talent, but the Palo Alto social networking company failed to land one person after Google offered him a six-figure bonus, according to several recruiters.

Google declined to comment on that story, but said its attrition is well below the industry standard, and when it has made counteroffers to employees tempted by Facebook, 70 percent decided to stay at Google.

Tech recruiter Robert Greene, of GreeneSearch in San Mateo, said "Google's doing what they can do to retain people. They've re-priced their options; they're paying people a lot of money to stay there. They've done a really good job of it. It is still hard for me to recruit people out of Google."

But "Facebook is the hottest company around," he added.

Jay Parikh, director of engineering at Facebook, said Facebook isn't "going after Google" and declined to comment on the hires from the Mountain View search company. "We're just trying to find the best talent."

"We work hard to find these people," said Parikh. "If you're hiring at Google, Facebook, Cisco or Yahoo, you face the same challenges. It's a constrained resource and the supply is lower than the demand." Facebook began the year with about 1,000 employees and is now at a little more than 1,700.

San Francisco game developer Zynga, which started the year with about 400 or 500 people, will reach 1,300 next week and has an additional 300 openings, said chief people officer Colleen McCreary.

McCreary said Zynga is attracting people from much larger, traditional software companies.

"Google has done a great job of building their work force," she said. But, "for people who have been there a long time, as soon as they get a reach-out from a recruiter or hear from their friends, 'I'm doing this neat thing,' they get interested."